By David Shepardson
(Reuters) -Ford Motor Co is set to announce as soon as Monday it plans to build a new $3.5 billion lithium iron phosphate battery plant in Michigan, sources told Reuters.
The plant is expected to be located in the Marshall, Michigan area, and eventually employ at least 2,500 workers.
Ford is expected to own and operate the plant with Chinese battery company China’s Contemporary Amperex Technology Co Ltd (CATL) as a technology partner to help develop the batteries, sources said. Ford declined to confirm the plans.
In August, Congress passed the $430 billion Inflation Reduction Act (IRA) legislation to restructure EV tax credits and eventually bar credits if any EV battery components were manufactured or assembled by a “foreign entity of concern” or if batteries contain critical minerals extracted, processed, or recycled by a foreign entity of concern.
The rules were aimed at weaning the United States off the Chinese battery supply chain. By Ford owning the plant outright, it may help ensure the batteries produced can qualify for tax credits.
Virginia Governor Glenn Youngkin has faced some criticism for withdrawing from a competition to attract a new Ford battery plant over its connection to CATL.
A spokesperson for Youngkin said last month that “while Ford is an iconic American company, it became clear that this proposal would serve as a front for the Chinese Communist party.”
In July, Ford said it plans to localize 40 GWh of battery capacity in North America starting in 2026. It also announced an agreement with CATL to explore their supplying battery packs for Mustang Mach-E models for North America starting in 2023 and said they would discuss cooperation for batteries in Ford vehicles around the world.
Reuters reported in January that Michigan was also a candidate for the Ford battery plant, sources said, and a decision could be made in the coming weeks.
(Reporting by David Shepardson; editing by Jonathan Oatis and David Gregorio)
